Supply and Demand; Price Floors and Price Ceilings
Consider the market for ipods. The government decides to impose a price ceiling on ipods. You are told that this is an effective price ceiling. Describe what would make this an effective price ceiling.
Consider the market for bicycles. The government decides to impose a price floor in this market of $100 per bicycle. If the demand curve for bicycles is P = 1,000 – 2Q and the supply curve for bicycles is P = .5Q, then what is the effect of the price floor on the market for bicycles?
Consider the market for bicycles. The government decides to impose a price floor in this market of $250 per bicycle. If the demand curve for bicycles is P = 1,000 – 2Q and the supply curve for bicycles is P = .5Q, then what is the effect of the price floor on the market for bicycles?